Nevada Collects $30 Million In Marijuana Taxes In First 6 Months
The Silver State’s marijuana industry is still in its infancy, but the cannabis market has raked in more than $30 million in tax revenue for the state so far. Retailers in Nevada have sold more than $195 million in cannabis during the first six months of its adult-use market.
Unlike other states (including California, Maine and Massachusetts) that legalized recreational marijuana in 2016, Nevada implemented its program a full six months ahead of the new year. The state charges a 15% tax on wholesale marijuana and a 10% tax on retail sales. That netted the state nearly $3.7 million in tax revenue for July 2017 – its first month of recreational sales. Tax revenue hit a peak of nearly $5.84 million in October 2017.
The state has seen its marijuana sales soar past Colorado’s cannabis sales during the first months of its legal market. Cannabis analytics firm New Frontier projects Nevada’s state-legal marijuana market to be worth $622 million by 2020.
Much of the market’s success can be attributed to the tourist-friendly Las Vegas. McCarran International Airport, which serves Las Vegas, recently installedabout 20 marijuana “amnesty boxes” on its premises. The boxes allow tourists to safely dispose of cannabis before boarding a flight. Local laws also prohibit marijuana on airport property.
While there has been some political wrangling over how that marijuana money gets distributed, the state is sending a good chunk of it towards education. Other cannabis-legal states have done the same – in Colorado, wholesale pot taxes are set aside for a public school fund, in addition to paying for regulatory oversight, youth drug prevention, and substance abuse treatment.
All of that tax revenue has caused some cash-strapped states to consider legalizing marijuana. The potential of legal cannabis to help balance the budget has been key to the legalization debate in Connecticut. While state Governor Dannel Malloy has been an opponent to legalizing cannabis, he included the possibility of recreational legalization as an option to consider for balancing the budget.
But lawmakers who are considering cannabis reform as a means to help fill state coffers should reconsider their motivations. Andrew Freedman, Colorado’s first marijuana czar (who now has his own consulting business) told me in 2016 that potential tax revenue shouldn’t factor into the legalization discussion: “People truly overestimate what you can do with marijuana money,” he said.
“At the end of the day, the debate shouldn’t be about tax revenue. ‘Should we lock up fewer people for marijuana?’ vs. ‘Is this going to create more of a burden on public safety?’—that’s where the debate should be.”